{
  "title": "IMF Executive Board Concludes the 2026 Article IV Consultation with Nepal and Completes the Seventh Review under the Extended Credit Facility",
  "publication": "IMF News, June 8, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/06/08/pr26188-nepal-imf-exec-board-concludes-2026-article-iv-consult-completes-seventh-review-ecf",
  "canonical": "https://www.imf.org/en/news/articles/2026/06/08/pr26188-nepal-imf-exec-board-concludes-2026-article-iv-consult-completes-seventh-review-ecf",
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  "summary": "The IMF Executive Board completed the seventh and final review under the Extended Credit Facility (ECF) Arrangement for Nepal, enabling a disbursement of SDR 31.32 million (about US$ 42.9 million).",
  "publishDate": "2026-06-08",
  "sections": [
    {
      "heading": "Disbursement and Program Completion",
      "content": "- The Executive Board completed the seventh and final review under the Extended Credit Facility (ECF) Arrangement for Nepal, enabling a disbursement of SDR 31.32 million (about US$ 42.9 million).\n- Total disbursements under the ECF for budget support amount to SDR 282.42 million (about US$ 384.1 million).\n- The ECF arrangement for Nepal was approved on January 12, 2022 for SDR 282.42 million (180 percent of quota).\n- Authorities have consented to the publication of the Staff Report prepared for this consultation."
    },
    {
      "heading": "Program Outcomes and Reform Progress",
      "content": "- Program has helped preserve macroeconomic and financial stability, build buffers, and protect the vulnerable.\n- Tangible progress in reforms cited:\n  - Modernization of monetary operations.\n  - Improvements in financial sector oversight.\n  - Completion of a loan portfolio review.\n  - Enhancements to the fiscal framework and transparency.\n  - Stronger public investment management.\n  - Upgrades to the anti-money laundering framework and legal reforms.\n  - Enhanced external auditing of the NRB and improved accountability of public enterprises."
    },
    {
      "heading": "Economic Outlook and Risks",
      "content": "- Growth:\n  - Real GDP growth expected: 3 percent in FY2025/26.\n  - Growth projected to strengthen to 5.3 percent in 2026/27.\n- Inflation:\n  - Headline CPI (period average) projected to pick up and remain close to the NRB’s 5-percent target.\n  - Headline CPI (period average): 3.1 for 2025/26; 5.0 for 2026/27.\n  - Headline CPI (end of period): 5.1 for 2025/26.\n- Near-term headwinds:\n  - Protest-related disruptions, weaker agricultural production, subdued private investment amid pre-election uncertainty, and spillovers from the war in the Middle East.\n- Upside support:\n  - Recent smooth transition of power to a single-majority government, accommodative policy stance, and an expansionary fiscal policy for FY2026/27 expected to support private sector recovery.\n- Key downside risks:\n  - Heightened global uncertainty.\n  - Uncertainty around policy continuity.\n  - Under-execution of public capital spending.\n  - Risks from the global economic environment."
    },
    {
      "heading": "Policy Recommendations and Priorities (as stated by IMF management and Executive Directors)",
      "content": "- Fiscal policy:\n  - Near term: An expansionary fiscal stance is necessary to support economic recovery.\n  - Medium term: A growth‑friendly gradual fiscal consolidation to preserve fiscal sustainability.\n  - Fiscal support for energy price shock should be temporary, targeted, and designed to avoid inflationary pressures.\n  - Boost capital expenditure execution by strengthening Public Investment Management and enforcing revised National Project Bank guidelines.\n  - Improve budget realism and upgrade the medium-term fiscal framework to enhance spending efficiency.\n  - Implement Domestic Revenue Mobilization Strategy and use the Tax Expenditure Report to rationalize tax expenditures.\n  - Strengthen social safety nets through better-targeted and transparent measures.\n- Monetary and financial sector policy:\n  - Adjust accommodative monetary stance if second-round price and external sector pressures arise.\n  - Monitor inflation and external sector developments closely and adjust monetary stance as needed.\n  - Address rising financial sector vulnerabilities by strengthening bank credit practices and risk-based supervision.\n  - Expand Loan Portfolio Review diagnostic to remaining banks and develop a resolution regime for problematic savings and credit cooperatives.\n  - Implement the Financial Action Task Force (FATF) Action Plan to strengthen the AML/CFT framework and exit from the grey list.\n  - Urged timely adoption of draft amendments to the Nepal Rastra Bank Act submitted to Parliament.\n- Governance and structural reforms:\n  - Strengthen governance and institutional credibility to improve business environment, create jobs, and enhance public service delivery.\n  - Continue IMF Governance and Corruption Diagnostics.\n  - Invest in skills, technology adoption, and natural disaster‑resilient infrastructure."
    },
    {
      "heading": "Executive Board Assessment",
      "content": "- Directors welcomed completion of the seventh and final review and broadly satisfactory program performance, which helped preserve macroeconomic stability and rebuild buffers despite shocks.\n- Directors supported continued engagement through the Post‑Financing Assessment and capacity development.\n- Agreed that expansionary fiscal policy is appropriate in the near term, followed by gradual consolidation; emphasized mobilizing domestic revenues and ensuring fiscal support is temporary and targeted.\n- Emphasized boosting capital expenditure execution by implementing the PIMA Action Plan and improving budget realism and the medium-term fiscal framework.\n- Recommended vigilance on inflation and external sector; welcomed draft NRB Act amendments and urged timely adoption.\n- Highlighted need to improve bank credit practices, risk-based supervision, expand loan portfolio diagnostics, resolve problematic savings and credit cooperatives, and implement FATF Action Plan.\n- Called for strengthening governance and institutional credibility and welcomed ongoing IMF Governance and Corruption Diagnostics.\n- Next Article IV consultation expected on the standard 12‑month cycle."
    },
    {
      "heading": "Selected Economic Indicators (2023/24–2027/28) — key figures preserved exactly as reported",
      "content": "- Output and Prices (annual percent change):\n  - Real GDP: 3.7 (2023/24 Est.), 4.6 (2024/25), 3.0 (2025/26), 5.3 (2026/27)\n  - Headline CPI (period average): 5.4 (2023/24), 4.1 (2024/25), 3.1 (2025/26), 5.0 (2026/27)\n  - Headline CPI (end of period): 3.6 (2023/24), 2.6 (2024/25), 5.1 (2025/26)\n- Fiscal Indicators: Central Government (in percent of GDP):\n  - Total revenue and grants: 19.4 (2023/24), 20.0 (2024/25), 19.9 (2025/26), 21.6 (2026/27), 21.7 (2027/28)\n  - of which: Tax revenue: 16.5 (2023/24), 17.2 (2024/25), 17.4 (2025/26), 18.6 (2026/27), 18.8 (2027/28)\n  - Expenditure: 21.8 (2023/24), 22.4 (2024/25), 24.9 (2025/26), 24.8 (2026/27)\n  - Recurrent expenditure: 18.5 (2023/24), 18.2 (2024/25), 19.3 (2025/26), 20.1 (2026/27), 19.2 (2027/28)\n  - Capital expenditure: 3.4 (2023/24), 4.8 (2024/25), 5.6 (2025/26)\n  - Operating balance: 0.9 (2023/24), 1.8 (2024/25), 0.6 (2025/26), 1.5 (2026/27), 2.4 (2027/28)\n  - Net lending/borrowing: -2.5 (2023/24), -1.9 (2024/25), -3.3 (2025/26), -3.2 (2026/27)\n- Money and Credit (annual percent change):\n  - Broad money: 13.5 (2023/24), 12.5 (2024/25), 11.0 (2025/26), 10.5 (2026/27), 10.4 (2027/28)\n  - Domestic credit: 6.3 (2023/24), 6.2 (2024/25), 6.1 (2025/26), 7.3 (2026/27), 8.3 (2027/28)\n  - Private sector credit: 8.1 (2023/24), 6.6 (2024/25), 7.8 (2025/26), 8.4 (2026/27)\n- Saving and Investment (in percent of nominal GDP):\n  - Gross investment: 30.4 (2023/24), 31.8 (2024/25), 34.9 (2025/26), 40.5 (2026/27), 40.6 (2027/28)\n  - Gross fixed investment: 24.3 (2023/24), 25.7 (2024/25), 29.1 (2025/26), 34.4 (2026/27), 34.0 (2027/28)\n  - Private: 21.0 (2023/24), 22.0 (2024/25), 26.0 (2025/26), 29.6 (2026/27), 28.4 (2027/28)\n  - Gross national saving: 34.3 (2023/24), 38.5 (2024/25), 41.8 (2025/26), 42.5 (2026/27), 40.3 (2027/28)\n- Balance of Payments:\n  - Current account (in millions of U.S. dollars): 1,663 (2023/24), 3,006 (2024/25), 3,166 (2025/26), 972 (2026/27), -162 (2027/28)\n  - In percent of GDP: 3.9 (2023/24), 6.7 (2024/25), 6.9 (2025/26), -0.3 (2026/27)\n  - Trade balance (in millions of U.S. dollars): -10,431 (2023/24), -10,651 (2024/25), -12,715 (2025/26), -15,594 (2026/27), -17,184 (2027/28)\n  - Trade balance (in percent of GDP): -24.3 (2023/24), -23.8 (2024/25), -27.7 (2025/26), -32.4 (2026/27), -32.5 (2027/28)\n  - Exports of goods (y/y percent change): 64.7 (2023/24), 19.8 (2024/25), 10.1 (2025/26), 9.0 (2026/27)\n  - Imports of goods (y/y percent change): 9.4 (2023/24), 19.5 (2024/25), 20.4 (2025/26), 10.0 (2026/27)\n  - Workers' remittances (in millions of U.S. dollars): 10,864 (2023/24), 12,636 (2024/25), 15,196 (2025/26), 15,691 (2026/27), 16,233 (2027/28)\n  - Workers' remittances (percent of GDP): 25.3 (2023/24), 28.2 (2024/25), 33.1 (2025/26), 32.6 (2026/27), 30.7 (2027/28)\n  - Gross official reserves (in millions of U.S. dollars): 14,547 (2023/24), 18,637 (2024/25), 21,827 (2025/26), 23,577 (2026/27), 24,390 (2027/28)\n  - In months of prospective imports: 11.4 (2023/24), 12.4 (2024/25), 12.1 (2025/26), 11.6 (2026/27)\n- Memorandum Items:\n  - Public debt (in percent of GDP): 48.3 (2023/24), 48.1 (2024/25), 49.6 (2025/26), 49.4 (2026/27)\n  - Nominal GDP (in billions of U.S. dollars): 42.9 (2023/24), 44.8 (2024/25), 45.8 (2025/26), 52.9 (2026/27)\n  - Nominal GDP (in billions of Nepalese Rupees): 5,709 (2023/24), 6,107 (2024/25), 6,505 (2025/26), 7,148 (2026/27), 7,900 (2027/28)\n  - Net International Reserves (in millions of U.S. dollars): 14,016 (2023/24), 18,031 (2024/25), 21,226 (2025/26), 23,029 (2026/27), 23,906 (2027/28)\n  - Primary Deficit (in billions of Nepali Rupees): 58 (2023/24), 43 (2024/25), 125 (2025/26), 128 (2026/27)\n  - Primary Deficit (in percent of GDP): 1.0 (2023/24)\n  - Tax Revenue (in billions of Nepalese Rupees): 945 (2023/24), 1,050 (2024/25), 1,133 (2025/26), 1,329 (2026/27), 1,484 (2027/28)\n  - Private sector credit (in percent of GDP): 91.1 (2023/24), 92.1 (2024/25), 92.2 (2025/26), 90.5 (2026/27), 88.8 (2027/28)\n  - Exchange rate (NPR/US$; period average): 133.0 (2023/24), 136.3 (2024/25), …\n  - Real effective exchange rate (average, y/y percent change): -0.1 (2023/24)\n\nPress Release No. 26/188 — IMF Communications Department — June 8, 2026.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Nepal and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- Press Release No. 22/6\n- Nepal and the IMF\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/06/08/pr26188-nepal-imf-exec-board-concludes-2026-article-iv-consult-completes-seventh-review-ecf"
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    "Published: June 8, 2026",
    "The Executive Board completed the seventh and final review under the Extended Credit Facility (ECF) Arrangement for Nepal, enabling a disbursement of SDR 31.32 million (about US$ 42.9 million).",
    "Total disbursements under the ECF for budget support amount to SDR 282.42 million (about US$ 384.1 million).",
    "The ECF arrangement for Nepal was approved on January 12, 2022 for SDR 282.42 million (180 percent of quota).",
    "Authorities have consented to the publication of the Staff Report prepared for this consultation.",
    "Program has helped preserve macroeconomic and financial stability, build buffers, and protect the vulnerable.",
    "Tangible progress in reforms cited:",
    "Growth:",
    "Inflation:",
    "Near-term headwinds:",
    "Upside support:",
    "Key downside risks:",
    "Fiscal policy:",
    "Monetary and financial sector policy:",
    "Governance and structural reforms:",
    "Directors welcomed completion of the seventh and final review and broadly satisfactory program performance, which helped preserve macroeconomic stability and rebuild buffers despite shocks.",
    "Directors supported continued engagement through the Post‑Financing Assessment and capacity development.",
    "Agreed that expansionary fiscal policy is appropriate in the near term, followed by gradual consolidation; emphasized mobilizing domestic revenues and ensuring fiscal support is temporary and targeted.",
    "Emphasized boosting capital expenditure execution by implementing the PIMA Action Plan and improving budget realism and the medium-term fiscal framework.",
    "Recommended vigilance on inflation and external sector; welcomed draft NRB Act amendments and urged timely adoption.",
    "Highlighted need to improve bank credit practices, risk-based supervision, expand loan portfolio diagnostics, resolve problematic savings and credit cooperatives, and implement FATF Action Plan.",
    "Called for strengthening governance and institutional credibility and welcomed ongoing IMF Governance and Corruption Diagnostics.",
    "Next Article IV consultation expected on the standard 12‑month cycle.",
    "Output and Prices (annual percent change):",
    "Fiscal Indicators: Central Government (in percent of GDP):",
    "Money and Credit (annual percent change):",
    "Saving and Investment (in percent of nominal GDP):",
    "Balance of Payments:",
    "Memorandum Items:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Nepal and the IMF](http://www.imf.org/external/country/NPL/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release No. 22/6](https://www.imf.org/en/News/Articles/2022/01/13/pr2206-nepal-imf-executive-board-approves-us-million-ecf-arrangement)",
    "[Nepal and the IMF](https://www.imf.org/en/countries/npl)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
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